Transportation Savings of St. Lawrence Seaway Minimal

Friday, November 04, 2005

John
Taylor has spent months analyzing traffic flows on the Great Lakes and St.
Lawrence Seaway to measure the economic benefits. The associate professor of
marketing at Grand Valley State University said he was surprised by what he
found.
"The transportation savings associated with the Seaway's overseas trade
are about $55 million annually," said Taylor. "It's not a very big number; I
thought it would be a bit more than this."
Taylor said the principal conclusion of the study is that a cessation of
ocean shipping on the Great Lakes would result in a transportation cost
penalty of $54.9 million per year. He said the relatively low cost penalty is
due to the fairly small volume of ocean tonnage, and the fact that rail, laker
and barge options are quite competitive.
The level of transportation cost savings associated with the Seaway is
important to understand given the problems created by ocean vessel borne
invasive species. Policymakers have long believed that the transportation cost
benefits of ocean shipping were critical. However, the new information may
lead regulators to rethink the level of controls on ocean ships entering the
freshwater Great Lakes.
Taylor's findings, funded by a grant from the Joyce Foundation in Chicago,
are highlighted in a just completed three-part series on ocean shipping in the
Great Lakes in the Milwaukee Journal Sentinel.
Taylor admits shipping rates can swing significantly, but called his study
an "accurate snapshot," for the annual economic benefit of opening the Great
Lakes to the world.